What's Next for Geron and Imetelstat?

A closer look at the promise and peril of Geron's imetelstat and the author's expectation of the most likely outcome from its current clinical hold.

It's been a volatile year for clinical-stage cancer-focused biopharmaceutical company Geron(NASDAQ:GERN), whose shares moved lower by 60% last week following the announcement of a full clinical hold of its only clinical compound, imetelstat, and rocketed higher by nearly 40% yesterday despite a lack of company-specific news.

There's a lot of promise and plenty of potential for failure built into imetelstat at this point, and the opportunities and threats afforded by this potential therapy for myelofibrosis, polycythemia vera, and multiple myeloma certainly merit a closer examination.

The promise of imetelstat Let's first look at the promise behind imetelstat and the reason why Geron shares rallied as high as $7.79 over the trailing year.

Perhaps the most intriguing aspect of imetelstat is that it offers a completely different approach than all other myelofibrosis treatments currently available or in clinical trials.

The only therapy currently approved by the Food and Drug Administration to treat myelofibrosis, a disorder where abnormal blood cells build up inside a patient's bone marrow, is Incyte (NASDAQ:INCY) and Novartis' Jakafi (known as Jakavi outside the U.S.), which is a JAK2 inhibitor. JAK2 is an enzyme that plays a key role in signal transduction; therefore, blocking JAK2 can inhibit the development cytokines that lead to cancer cell proliferation.

There are also a number of other JAK2 inhibitors currently under clinical development to treat myelofibrosis, including Cell Therapeutics' (NASDAQ:CTIC) pacritinib, which is being tested in two phase 3 trials, PERSIST-1 and PERSIST-2, which are differentiated based on a patient's platelet count, and Gilead Sciences' (NASDAQ:GILD) momelotinib, which was acquired when it purchased YMI Biosciences in 2012 and is also in late-stage trials. In addition, Gilead has an in-house developed therapy, simtuzumab, also being studied in mid-stage trials as a potential myelofibrosis therapy.

The point being that JAK2 inhibitors dominate the current landscape of myelofibrosis... with the exception of imetelstat.

Geron's imetelstat is a telomerase-inhibiting therapy designed to inhibit "clonal proliferation of malignant progenitor cells compared to normal progenitors." An abstract presented at the American Society of Hematology's annual meeting in 2013, which you can view here, deemed that JAK2 mutations weren't specific or pathogenetically essential for myelofibrosis, but that telomerase inhibitors provided selective anti-clonal activity. In other words, instead of simply lessening the symptoms associated with myelofibrosis via JAK2 inhibitors, this study appears to demonstrate that telomerase inhibitors actually have the potential to treat the disease.

Source: Geron.

The investigator-sponsored trial (IST) conducted by the Mayo Clinic would signify that imetelstat does indeed have positive cancer-fighting potential. Released in December and involving 22 patients with myelofibrosis, imetelstat produced a partial or complete remission in five patients with 41% overall responding to the therapy. This is unique because complete responses in myelofibrosis are incredibly rare.

The perils of imetelstatOn the other hand, imetelstat is still very much untested and unknown as we discovered last week when Geron announced that imetelstat had been placed on full clinical hold by the FDA.

According to the FDA, it's concerned with persistent low-grade liver function test abnormalities that showed up in its phase 2 polycythemia vera study. The hold is based on the possibility that long-term use of imetelstat could lead to liver damage, and the agency is uncertain if the low-grade liver function in current study patients is reversible.

Making matters worse for Geron, after abandoning its stem-cell research in 2011 imetelstat represents its only clinically researched drug. With imetelstat on clinical hold, Geron is akin to being afloat in the middle of the ocean without sails or paddles. The company did have $66.2 million in cash as of its most recent quarter and generated gross proceeds of $90 million with a common stock offering of 22.5 million shares in January, meaning it has plenty of cash to keep its operations going in the meantime, but its lack of pipeline depth is worrisome.

What's next for imetelstat?At this point, there are three possible outcomes for imetelstat: complete removal of its clinical hold, removal of its clinical hold with considerably tougher warnings, or discontinuation of the study.

If I were forced to choose a possible outcome, my personal opinion is that Geron will be allowed to continue its study of imetelstat with considerably tougher standards, which may wind up excluding some patients from the treatment.

Based on limited study data thus far, and the fact that imetelstat delivered a complete response in its IST trial, something not seen with JAK2 inhibitors, it's pretty evident that it has a strong anticancer effect. But the FDA simply can't look the other way when it comes to safety. What this could mean is that imetelstat may take a backseat to JAK2 inhibitors when it comes to myelofibrosis treatment and could be used only as a last resort therapy.

I'd point to Ariad Pharmaceuticals(NASDAQ:ARIA) here, which had its FDA-approved leukemia drug Iclusig temporarily removed from pharmacy shelves in October for a few weeks after a two-year follow-up study showed an increase in severe thrombotic events (i.e., blood clots) in patients taking the drug. Thankfully for Ariad and shareholders, Iclusig was allowed to return to market just weeks later, but had additional safety warnings attached to help physicians when prescribing the drug. It also was relegated to something of a last resort treatment in its approved indications. We could see something very similar happen to imetelstat, which wouldn't be devastating, all things considered, but could rule out a quick ramp-up in revenue or a huge patient pool if approved.

What will really matter is whether current imetelstat trial patients' liver function can be stabilized and improved. There's always the possibility imetelstat could be combined with a concurrent therapy to help regulate liver function, but there's also the potential that it could be shelved completely as well due to safety concerns.

Either way, I do suggest keeping your eyes on Geron as imetelstat has demonstrated flashes of potential, and the ultimate determination by the FDA of imetelstat's safety will go a long way to determining whether Geron heads significantly higher or lower from here.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

Author

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and investment planning. You'll often find him writing about Obamacare, marijuana, drug and device development, Social Security, taxes, retirement issues and general macroeconomic topics of interest. Follow @TMFUltraLong